He will have to deal with any protectionist measures countries impose in the coming months in response to the coronavirus pandemic. Foreign trading partners will also seek to reengage in trade negotiations and resolve a fight that has crippled the World Trade Organization’s dispute settlement system.
Biden has pledged to put “the middle class” at the center of his trade policy and to not sign any new trade deals until the United States has made major new investments in its workers and infrastructure.
“The world is facing inescapable challenges: a rapidly changing climate, the risk of nuclear conflict, trade wars, a rising China and an aggressive Russia, millions of refugees seeking shelter and security, and attacks on universal human rights and fundamental freedoms,” he adds on his campaign website.
“The next president must repair our relationships with our allies and stand up to strongmen and thugs on the global stage to rally the world to meet these challenges. We can reclaim our longstanding position as the moral and economic leader of the world.”
The election brawl
The Trump campaign has already indicated that it intends to attack Biden for his role in promoting Obama’s signature trade deal, the Trans-Pacific Partnership, as well as for his 1993 vote in favor of NAFTA, which Trump has updated and renamed the USMCA.
“Working men and women across this country have to be reminded of Biden’s record on notable job-killing trade deals like TPP,” Tim Murtaugh, communications director for the Trump 2020 reelection campaign, said in a new video. “We all know Joe Biden is going across the country this year masquerading as some kind of blue-collar hero when his record is exactly the opposite.”
The campaign also released last week a controversial ad portraying Biden as soft on China, a theme that Trump is expected to repeatedly hammer at in the coming months.
Whether those attacks are successful in wooing voters is a big question, said Bruce Stokes, who just finished seven years at Pew Research Center surveying global attitudes on trade.
“Americans generally think trade is good for the country, but they are not sure it’s good for them personally,” Stokes said. “Psychologically, people need something or someone to blame for their misfortune and trade is a handy bogeyman, with a kernel of truth to the fact that trade has destroyed many livelihoods.”
However, concerns about TPP never entered the national consciousness to the degree that concerns about NAFTA did, while NAFTA itself is a nearly 30-year-old deal that no longer has much more than symbolic importance to many voters.
“In general, I don’t think his vote three decades ago hurts him. But NAFTA is a symbol for the destruction wrought by globalization, so it continues to be a rallying cry,” said Stokes, executive director of the German Marshall Fund’s project on the future of the relationship between the United States and Europe.
Biden decided to endorse the USMCA only because of changes that House Democrats obtained in negotiations with the Trump administration, his campaign spokesperson Andrew Bates said.
“Trump wanted a massive giveaway to pharmaceutical companies and no real enforcement of labor protections. The deal that Trump negotiated was a bad deal, but Speaker Pelosi, the Democrats in Congress, and the labor movement won important changes in that deal, and made it a lot better,” Bates told POLITICO.
Trump’s soft-on-China charge might be more successful because public attitudes about that country have hardened over the past decade. However, those anti-China views are more ingrained among Republicans and older Americans, and less strongly felt among Democrats and 18- to 29-year-olds, a key demographic for Biden to win in November.
However, Sen. Bernie Sanders (I-Vt.) also went hard after Biden’s trade record during the Michigan primary election and lost by a wide margin, in a sign that the attack may not be as devastating as the Trump team thinks because of Biden’s ties to organized labor.
For his part, Biden is expected to argue that Trump’s trade policies have hurt working-class voters more than they have helped. His decision to renegotiate NAFTA put the future of trade with Canada and Mexico, the United States’ two biggest trading partners, in doubt for more than two years.
Trump’s trade war with China has cost U.S. businesses $50 billion in additional tariffs since July 2018 and wrecked U.S. exports to one of the agriculture sector’s biggest markets after Beijing retaliated. Trump doled out more than $23 billion in taxpayer-funded payments to shore up his support among farmers.
He also signed a “phase one” deal with China that commits Beijing to buying an additional $200 billion worth of U.S. agricultural, energy, manufacturing and services products over the next two years. But the coronavirus outbreak has greatly weakened China’s demand and raise doubts about how much much they will actually buy.
“Donald Trump was soft on China when it mattered most to the American people: by failing to press them about the coronavirus outbreak and to insist we had access there — like Joe Biden and a host of experts urged him to do,” Bates said. “That is malpractice of historic proportions, and our country is paying a horrible price for it.”
Trump has brushed off charges that he ignored early warnings and points to his Jan. 31 decision to ban air travel from China as proof that he acted aggressively.
A former U.S. trade official, who asked not to be identified to speak more candidly, noted the havoc wreaked by the coronavirus is prompting countries to consider more protectionist policies, in an imitation of Trump’s first three years.
“With weakened international institutions and a lack of consensus to keep markets open, the future trade environment looks brutal absent a change in leadership,” the former official said.
How Biden stacks up against Trump
Analysts say Biden’s long track record in the Senate and eight years as President Barack Obama’s vice president demonstrate how the two men approach trade differently:
— Biden would build international coalitions to confront China, while Trump prefers to go it alone;
— Biden would respect international rules, while Trump has taken pride in flouting them;
— Biden would use trade deals to expand market access, level the playing field and set global standards, while Trump uses trade deals to reduce bilateral trade deficits, manage trade, and create future leverage through sunset clause provisions.
The Trump campaign, however, portrays the president as a tough-minded leader who is not afraid to break the fine china to get better trade terms for United States.
“Luckily for Americans, we have a president in Donald J. Trump who actually make promises and then keeps them,” Murtaugh said. “He was on the campaign trail in 2015 and 2016 saying he was going to do away with NAFTA and replace it, and thanks to his record of keeping promises, he did exactly that.”
Either Trump or Biden would quickly have to jump into trade issues next year: The president has to decide early whether to seek congressional renewal of trade promotion authority legislation that is set to expire on July 1, 2021.
That legislation, long considered essential for U.S. trade negotiations, allows the president to submit trade deals to Congress for a straight up-or-down vote without allowing for lawmaker amendments. The last renewal battle, in 2015, was one of the toughest congressional trade fights in years.
A previous version of TPA expired before Obama took office in January 2009. Many trade experts believe his failure to seek early renewal of the legislation led to his inability to win approval of the TPP before leaving office in early 2017, allowing Trump to easily withdraw from the pact.
Obama, faced with the financial crisis and a strong desire to push through major health care reform, had little interest in trade for much of his first term but gradually came to see it as a tool for strengthening ties with other countries and expanding U.S. influence around the world.
Biden already knows that, based on his eight years as vice president and three decades on the Senate Foreign Relations Committee, Reinsch said. “Biden is a foreign relations guy. He looks at the big picture. He sees trade as part of the big picture,” he said.
Trade experts see little chance Biden would continue Trump’s idea of imposing tariffs on automobile imports using a national security provision of the 1962 Trade Expansion Act.
But he still would be saddled with dealing with Trump’s trade legacy, including the China tariffs and the duties on steel and aluminum. Both would be politically difficult for Biden to remove and he could come under pressure from union groups and steel manufacturers during the campaign to commit to maintaining them.
Similarly, progressives who flocked to Sen. Bernie Sanders’ (I-Vt.) presidential campaign share the Vermont senator’s skeptical view of trade agreements, and might view any Biden statement of support for new trade deals as kowtowing to big business. That creates an opening for Trump, who has moved the Republican party far to the left on trade.
“That’s a huge risk,” the former U.S. trade official said. “We have to hope that [Biden’s] advisers find ways to parry these attacks without taking bad positions.”
The China dilemma
Under pressure from business, Biden would likely have to enter into negotiations with Beijing to obtain enough concessions to justify removing the duties or scaling them back, trade experts said. But that could be part of a broader discussion on other friction points in the overall relationship, in contrast to Trump’s single-minded focus on reducing the trade deficit.
Both the Obama and the George W. Bush administrations had a joint strategic and economic dialogue with Beijing, but Trump discarded the strategic element to focus solely on trade.
To address the overcapacity of steel, Biden could seek to revive talks under the Organization for Economic Cooperation and Development to put more pressure on China to reduce its excess steel production.
He could also blunt the impact of the steel tariffs on domestic users and trading partners by approving more requests for individual tariff exclusions. He might also take steps to reduce the cost of Trump’s China tariffs on U.S. companies without taking the politically riskier move of removing all the duties at once.
A more international approach could also involve deciding to rejoin the TPP, while insisting on stronger labor and environmental provisions than the Obama administration he served in had negotiated.
“I don’t think he’ll do that on Day One, Two or Three,” but he’s likely to be pushed in that direction, Reinsch said. He will also face pleas from Japan to rejoin the pact to offset China’s influence and shore up the U.S. presence in the Asia-Pacific region.
Although TPP seemed like political dynamite during 2016, Obama administration officials were convinced they had the votes to win approval in a lame duck session of Congress after the election. However, Trump’s surprise victory squelched that opportunity.
Biden, who was a vociferous supporter of the deal when he was part of the Obama administration, has emphasized the need for some sort of Asia-Pacific agreement.
“Either China’s going to write the rules of the road for the 21st century on trade, or we are,” Biden said last year during a Democratic candidate debate.